Sensex makes tepid recovery, bank shares lead gains

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Mumbai, Jan 16, 2017 (PTI),

Jan 16 2017, 10:17am ist

updated: Jan 16 2017, 16:49pm ist

The market today rebounded by over 50 points to end at 27,288, spurred by a rally in financial stocks amid reports that the finance ministry is likely to finalise the capital infusion plan for public sector banks. The funds infusion will be more than Rs 25,000 crore as announced in the earlier budget and the additional requirement will reflect in the final batch of supplementary demand for grants to be presented in the upcoming budget session, sources said.

Moreover, positive results by some companies cheered up sentiments, brokers said. The 30-share Sensex, after shuttling between 27,335.08 and 27,172.68, ended higher by 50.11 points, or 0.18 per cent, at 27,288.17. The gauge had shed 9.10 points on Friday.

Also, the broader NSE Nifty settled 12.45 points up, or 0.15 per cent, at 8,412.80. Intra-day, it touched a high and low of 8,426.70 and 8,374.40, respectively. There were hopes that Finance Minister Arun Jaitley may address the transient pain of demonetisation by lowering corporate tax rates in the upcoming Budget for 2017-18, which supported the recovery.

The stock of SBI surged 1.93 per cent to Rs 255.75. HDFC Bank, too, rallied in line with the overall upmove and gained 1.21 per cent to Rs 1,247.60 while Axis Bank rose 1.07 per cent to Rs 478. ICICI Bank gained 0.62 per cent to Rs 269.20. However, caution set in on lower Asian close and weak European indices in their early session amid a fall in the pound after reports that Britain may be heading to a clean break with the EU.

Meanwhile, WPI inflation rose to 3.39 per cent in December 2016, fuelled by rising prices of petrol and diesel. Overseas, Asian stocks ended lower, reversing initial gains. Key indices in China, Japan and Hong Kong dropped by up to 1 per cent. Europe was also trading lower in early deals and key indices like France, Germany and the UK fell by up to 0.75 per cent.

Meanwhile, foreign investors extended their selling on the Indian bourses and sold shares worth a net Rs 117.59 crore last Friday, as per provisional data released by the stock exchanges. The recovery in Sensex was also supported by gains in Tata Steel, Tata Motors, Adani Ports, Hero MotoCorp, HDFC Ltd, Lupin, Power Grid, Asian Paints, L&T, Bajaj Auto and Cipla, rising by up to 2.69 per cent.

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